The rebound in freight rates on the US route has come to an end, as the Shanghai Containerized Freight Index (SCFI) fell again, snapping a four-week rising streak.

According to the latest data released by the Shanghai Shipping Exchange on November 7, the SCFI index fell by 55.6 points to 1495.1 points, a weekly decline of 3.58%. Among the four major long-haul routes, freight rates for three fell, with the exception of the Mediterranean route, which saw an increase. The decline in US route rates was particularly significant, exceeding 15%.

Last week, the freight rate for the Far East to US West Coast route fell by $435 to$2,212 per FEU, a weekly drop of 16.43%. The Far East to US East Coast route fell by $590 to$2,848 per FEU, a weekly decrease of 17.16%. The Far East to Europe route fell by $21 to$1,323 per TEU, a weekly decline of 1.56%. In contrast, the Far East to Mediterranean route rose by $46 to$2,029 per TEU, a weekly increase of 2.31%.

On the short-haul routes, the Far East to Japan Kansai rate remained unchanged from the previous week at $312 per TEU. The Far East to Japan Kanto rate was also unchanged at$321 per TEU. The Far East to Southeast Asia rate increased by $31 to$512 per TEU. The Far East to South Korea rate remained flat at $138 per TEU.

Industry insiders indicated that the market still faces downward pressure on freight rates in the short term. For many freight forwarders, the listed spot market price for the US West Coast route is around $1,900 to$2,850 per FEU, but the actual received price is mostly between $1,800 and$2,100. The US East Coast rate is around $2,600 to$3,800, and the Europe route rate is about $1,600 to$2,300. Although the planned rate increase for November 1 failed to materialize, current rates are still higher than those at the beginning of October.

Currently, the container shipping market is in the traditional off-season for Europe-US routes, with little change in cargo volume, making it difficult for shipping companies to adjust freight rates. The US’s cancellation of the 10% so-called “fentanyl tariff” on Chinese goods is expected to help China’s export orders. With orders taking effect from the 10th, it is projected that a restocking wave could emerge in mid-to-late November and December, continuing until before the Chinese New Year. It is estimated that cargo volume will not be worse than in the third quarter, nor will it see a massive surge, which will help support freight rates.

Meanwhile, the US has signed trade agreements with multiple Asian countries. It is expected that clients on the US route will seek to procure from favorable countries based on these agreements, scheduling shipments to replenish inventory. This, combined with pre-Chinese New Year stockpiling demand, suggests that initial cargo volumes will increase moderately, considering procurement realignment and US inflation.

The market is also watching the impact of the US Supreme Court’s review of Trump’s global tariff policies. Trump publicly admitted for the first time that tariff costs “might” be borne “partly” by American consumers but emphasized he has a “Plan B.” It is estimated that US tariff policy remains uncertain. Coupled with multiple factors like inflation, shipping companies are currently relying on a surge in blank sailings and reduced capacity to support freight rates.

Looking ahead, the market will likely find it difficult to escape downward pressure on freight rates in the short term. US import cargo volume has declined this year due to the tariff war. The year-end restocking wave is expected to increase cargo volume by approximately 3% to 4% compared to the annual average. Furthermore, after the US eliminated the de minimis exemption for small parcels, most e-commerce goods have shifted to bulk cargo, and the transfer from air to sea freight will also contribute to increased volume. Therefore, a significant drop in US route freight rates before the Chinese New Year is unlikely.

Source: International Ship Network